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UPDATE 1-Brazilian miner Vale to receive binding offers for coal business

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  • CL=F
  • VALE

(Adds detail, context)

By Marta Nogueira

RIO DE JANEIRO, Oct 29 (Reuters) - Brazilian miner Vale SA expects to receive binding offers for its coal business in early November, an executive said on Friday, allowing the company to completely exit the coal industry.

"We have already received some indicative proposals to sell the business. Now we expect to receive binding offers in early November," Vale Finance VP Luciano Siani said during a conference call.

He was referring to the Moatize asset, which has been put up for sale even before reaching production goals set in Vale's business plan.

The move comes as Vale reported an impairment charge of almost $2 billion from its coal business in the third quarter, weighing on results that came in significantly below analysts' forecasts.

Siani acknowledged that the Moatize coal mine, located in Mozambique, has not yet reached a goal of producing about 12 million tonnes a year. He said Vale does not want to wait as it tries to speed up achievement of certain environmental goals.

Vale said it considered keeping the asset for an additional 12 or 24 months, so it could achieve the current production target and demonstrate its long-term feasibility, or selling it at once.

"We made the second decision. For a number of reasons, we do not want to wait, Vale does not want to own coal assets anymore. So we are now selling a plan, not a reality, and then potential buyers will need to evaluate the asset's capacity," Siani said.

He added that Vale plans to negotiate an earn-out clause with prospective buyers, probably tied both to prices and volumes, as Vale does not see the deal reaching the $2 billion in value and does not wish to leave money on the table. (Additional reporting by Gabriel Araujo; Editing by Emelia Sithole-Matarise)